How Will Home Depot (HD) Stock Be Affected By Possible Data Breach?

NEW YORK (TheStreet) -- Shares of Home Depot Inc. (HD) are down -2.32% to $90.87 after it was reported that the retailer may have suffered a massive credit card breach, according to KrebsonSecurity.com.

"Multiple banks say they are seeing evidence that Home Depot stores may be the source of a massive new batch of stolen credit and debit cards that went on sale this morning in the cybercrime underground. Home Depot says that it is working with banks and law enforcement agencies to investigate reports of suspicious activity, Krebs said.

Home Depot confirmed to Krebs that the company is investigating.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

"...we are looking into some unusual activity and we are working with our banking partners and law enforcement to investigate," Home Depot said.

There are signs that the perpetrators of this apparent breach may be the same group of Russian and Ukrainian hackers responsible for the data breaches at Target (TGT) , among others.

The banks contacted by Krebs all purchased their customers' cards from the same underground store - rescator[dot]cc - which on September 2 moved two massive new batches of stolen cards onto the market.

TheStreet Ratings team rates HOME DEPOT INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HOME DEPOT INC (HD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HD's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • HOME DEPOT INC has improved earnings per share by 22.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HOME DEPOT INC increased its bottom line by earning $3.75 versus $3.00 in the prior year. This year, the market expects an improvement in earnings ($4.50 versus $3.75).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $1,795.00 million to $2,050.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, HOME DEPOT INC's return on equity significantly exceeds that of both the industry average and the S&P 500. 
  • You can view the full analysis from the report here: HD Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE

More from Markets

Stocks Dive Globally as U.S.-China Trade War Intensifies

Stocks Dive Globally as U.S.-China Trade War Intensifies

Cryptocurrencies Could 'Bring the Internet to a Halt', Central Bank Agency Warns

Cryptocurrencies Could 'Bring the Internet to a Halt', Central Bank Agency Warns

Volkswagen's Audi CEO Arrested in Diesel Emissions Probe

Volkswagen's Audi CEO Arrested in Diesel Emissions Probe

China Trade War, Google, JD.com, Tesla, Brooks Koepka - 5 Things You Must Know

China Trade War, Google, JD.com, Tesla, Brooks Koepka - 5 Things You Must Know

Billionaire Investor Tim Draper Explains Why Bitcoin Will Hit $250,000 in 2022

Billionaire Investor Tim Draper Explains Why Bitcoin Will Hit $250,000 in 2022